National Mineral Policy 2006 - Department of Mines

esponsible for all rights, liabilities, and duties incurred by the transferor under the PL priorto the transfer.1.72 What applies to PLs also applies to MLs that have been obtained by PL holders. Rule37(2) of MCR will need to be modified and the negative approach of the entire Rule 37rectified insofar as such licences obtained by prospecting companies are concerned. The thirdproviso in Rule 37(2) of MCR will need to be deleted.Reservation Provisions and Special Powers1.73 Promotional detailed exploration is carried out by MECL and state Directoratesthrough public funding. Some state and Central PSUs, including MECL, also carry outcommercial prospecting on behalf of their clients. Therefore, the field of exploration andmining in India is open to both public and private sectors. However, certain provisions underthe MMDR Act give primacy to the public sector vis-à-vis the private sector. The relevantprovisions under the MMDR Act that give special powers to the Central and stategovernments to undertake reconnaissance, prospecting, or mining operations in certain areasafter reserving them exclusively for the public sector are contained in Sections 4(3), 17(2),17(4), 17A(1A), and 17A(2).1.74 These provisions run counter to the spirit of level playing field, which is essential ifprivate investment, especially FDI, is to be attracted to the mining sector. Given the fact thatexpenditure on exploration in India is a small fraction of world expenditure there is need fornot only increasing public spending in exploration but also attracting private investment,including FDI, into exploration and mining. It was pointed out to the Committee that thereservation powers have been and are being used by the states to stall private sector initiativeand it was argued that there should be a level playing field between the public and privatesectors and that the government should adopt an arm’s-length approach. It may be mentionedhere that it is necessary to distinguish between the State’s role as a promotional explorer andas a commercial explorer/miner. The work done by GSI, state Directorates, and a certain partof the work done by MECL (paid for by government) is mainly promotional in nature. Nobusiness interests are involved here as the output is available to the public at large forcarrying out the next stage of operations. On the other hand, commercial operations of PSUs48